NC colleges hope Bidens loan forgiveness plan improves financial literacy / Public News Service
Applications for federal student loan relief should be online in a few weeks, and financial aid offices say it’s also an opportunity to increase financial literacy.
Valerie Clem Brown, director of financial aid at William Peace University, said she supports the The Biden administration’s plan to offer $10,000 in loan forgiveness to federal student borrowers with an income of less than $125,000 a year, but added that she is also concerned that there has not been enough focus on improving freshmen’s understanding of how much money they borrow and how their chosen career might affect their ability to repay it.
“Most of us couldn’t go out and just buy a house without taking out a loan, but we do our research and figure out what we need to do – that way we won’t be in the hole years from now. ” she says. “And I think the same thing needs to happen with student loans.”
Brown noted that the US Department of Education requires 30 minutes of student loan entry counseling before a person can take out their first loan, but she said she doesn’t think that’s enough.
Education Data Initiative Research shows that most borrowers have $460 in monthly student loan payments.
Jeni Myers, a recent college graduate, said she was surprised and excited by the news that some of her debt would be forgiven. She said she believed that announcement a game-changer for students like her, who are solely responsible for making ends meet to pay their tuition.
“What paved the way for me to go to school were my scholarships and my loans,” she said. “So when I saw this initiative, I was very, very relieved too, because I have student debt of about $35,000.”
Brown advised students to use approved resources for information about their student loans, such as their financial office and the US Department of Education website, ed.gov.
“Making sure they go to a professional for information, making sure they don’t just ask their friends,” she said. “There are a lot of really good resources online, but there are also a lot of really bad resources.”
The North Carolina Department of Revenue said student loan relief payments are considered taxable income under state law.
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